EuropeCentral bank(ECB) President Christine Lagarde said at the central bank’s annual meeting in Jackson Hole on the 25th that it is necessary for policymakers to see a timely and sustained decline in inflation in the euro area before policymakers can declare war on inflation. Can do was won.

Lagarde insisted on a change in the central bank’s 2 percent inflation target, saying that price growth will remain slow this year and that inflation will look very different by the end of the year.

The ECB previously forecast inflation in the euro area at 2.9% in the fourth quarter of this year, down from current levels of more than 5%.

Lagarde also said that major changes to the way the global economy works, from protectionism to the energy transition, could lead to greater volatility in inflation and more persistent price pressures. She warns that higherinvestDemand and excess supply constraints can result in strong pricing pressure that not all industries can withstand.

She said she would keep a close watchLaborWages One of the areas where prices rose the most are labor-intensive services.

Lagarde said the labor market is undergoing profound changes, the energy transition has brought new investment needs, and deepening geopolitical differences will lead to protectionism and supply chain bottlenecks.

“The new environment creates conditions for larger relative price shocks than before the pandemic,” he said. “It is not clear at this stage whether all these individual changes will prove to be permanent. But it is already clear that in many cases, the effects have been more permanent than we initially expected.”

Lagarde warned that higher investment requirements and greater supply constraints could lead to strong price pressures that not all sectors could withstand.

Complicating the picture is the fact that workers now enjoy greater bargaining power over wages due to tighter labor markets, while companies are also quicker to adjust prices, exerting upward pressure on prices.

Lagarde said that although these changes are still likely to be temporary, central bankers need to recognize that some of them may last longer, “and we have to be very careful that large fluctuations in relative prices pay Don’t go by volatility. Chasing prices and influencing medium-term inflation expectations”.

“If expected wage increases are factored into corporate pricing decisions, it could make inflation more stable, what I call ‘tit to tit’ inflation,” he said.

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